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New Labour Code: Will companies offer four-day workweek?

The proposal appears unworkable in manufacturing, where machines need to be operated round-the-clock, and project-based sectors like real estate; longer hours may also deter women workforce.

February 09, 2021 / 07:22 PM IST

As is often the case with labour laws, what may appear workable on paper, may not be so on ground.

The new Labour Codes will allow companies in India to be flexible in the number of working hours per day. It is proposed that companies will be allowed to have up to 12 hours of working per day.

48 working hours per week

This is subject to a maximum of 48 working hours per week, as per a labour ministry proposal.

However, industry experts believe that this extension of workdays can be taken only by a handful of companies.


Rituparna Chakraborty, Co-founder and Executive Vice President, TeamLease Services, said that there is a misconception that the government is giving a four-day-work week.

"The government is not saying anything. It is merely giving an option to companies to get employees to work for extended hours," she said.

Three consecutive holidays per week

Apurva Chandra, Union Labour and Employment Secretary, said at a briefing on February 8 that if a company opts for 12-hour working per day for its employees, there would be three consecutive holidays in a week.

Labour unions have raised concerns about the 12-hour proposal, saying that this could lead to exploitation of worker rights and could potentially affect their health.

However, Chandra clarified that the new labour laws will not compromise the health and welfare of workers. He had also said that the implementation of codes on wages, industrial relations, occupational safety, health and working conditions and social security, will ensure social security for all employees.

The government is merging 44 labour laws into four broad codes, which will cover all aspects related to worker safety, working hours, benefits, and compensation.

Will companies implement a four-day week?

Human resource experts said that there could be no more than a handful of companies who could implement a 12-hour-work week.

"If you look at the mathematics, if an office is not open for one whole day, then there are a lot of overhead costs like electricity, pantry, air conditioning that can be saved. But it is an organisation's choice," added Chakraborty.

But large manufacturing and real estate firms who work on projects, will be unable to do so. Moneycontrol spoke to human resources (HR) heads of three companies, two in electrical goods manufacturing and one in the construction industry, who said that this would not be feasible on a mass scale.

"When we are in the process of manufacturing, there is no question of keeping the factory shut for one day. Some machines need to be operated round-the-clock and a 12-hour-workday means three-day holidays. This is not sustainable," said the head of HR at an electrical goods company.

Could suit white-collar corporate offices

He suggested instead, that only white-collar jobs in corporate offices can have a system of four-day working.

A few industry experts are also of the few that implementation of 12-hour working per day could also reduce female workforce participation. India's female workforce participation rate stood at 20.33 percent in 2020, according to data from International Labour Organisation (ILO).

Delhi-based labour relations expert, Vipin Bose, said that 12-hour-days will dissuade women from joining the workforce.

"The reality is that there is a societal bias against working women. If you give the option to companies to increase the number of daily working hours to 12, then women will drop out. Considering that there is research to show that gender diversity is leading to more productivity, companies will not choose this option," he added.

Bose also said that the fact that four-day week would also mandate three days of consecutive leave, is another factor that will demotivate Indian employers from opting for it.

Companies seek legal advice

Corporates have already started approaching lawyers and industrial relations experts to study the pros and cons of the proposed labour laws.

Niranjan Sekhri, an HR lawyer at Pune-based, BRT Legal Advisors, said that while the four-day workweek is slowly catching up in the developed markets of Europe, it is still some distance away from being implemented for Indian workers.

In Europe, countries like Sweden offer a four-day working week with a cap of 32 hours per week.

"We have had some discussions with companies about extending the working hours. However, the cons seem to be higher since this will mean that business operations will have to stay shut for 72 hours every week. This is not a viable option," he added.

Based on the recommendations received from all stakeholders, the government will finalise the laws. It is likely that these new labour rules will be implemented from April 1, 2021.
M Saraswathy is a business journalist with 10 years of reporting experience. Based in Mumbai, she covers consumer durables, insurance, education and human resources beat for Moneycontrol.
first published: Feb 9, 2021 07:22 pm

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